BY SAM ALFAN.

A local bank has been granted a major reprieve in a leasing tender row with a motor vehicle company.

High Court Judge Wilfrida Okwany declined an application by Vehicle and Equipment Leasing Ltd (VAELL) to compel NCBA bank to pay Sh291 million.

The judge said the firm did not provide sufficient proof that the bank had breached an agreement entered in 2014 for the finance of the vehicles.

The firm had borrowed Sh232 million from the bank to purchase over 200 vehicles from Toyota Kenya.

The vehicles were later leased to Tsushi Capital Kenya Ltd, which then leased them to the government. However, a dispute arose and the firm could not access it’s bank account.

The bank also failed to honour instructions on payment even when the account had sufficient amounts. VAELL said it suffered on accrued charges when the loan was not serviced.

The court heard that the lender was oppressive and aggressively detaining the company’s funds and freezing its accounts and applying charges on the basis of insufficient funds.

However, Justice Okwany dismissed the claim saying VAELL failed to prove the claims it made against the lender.

“I agree with counsel for the bank that the onus of proof was on the plaintiff and it failed to discharge it,” judge Okwany said.

The vehicle leasing firm had argued that as a result of the bank’s conduct, it suffered losses and the vehicles were later sold at low prices.

The firm said the vehicles were returned by police to Toyota in September 208 under unclear circumstances, and the bank allegedly frustrated the sale of the vehicles, which continued to depreciate yet the bank continued to pile interest on the loan.

The firm had sought compensation of Sh187 million arguing that the vehicles, which were disposed of in 2019, were undervalued.

The company also sought the cost of insurance of Sh50 million plus a refund of Sh382 million allegedly debited to the account and which were unlawfully withdrawn.

Further, VAELL accused the bank of erroneously reporting it to the credit reference Bureau, denting its reputation. The court, however, dismissed the claim stating that the lender was under statutory obligation to report.

The court ruled that for a period of three years, the parties had treated the account as a collection account and VAEL could not access it.

BY SAM ALFAN.

Communication Authority of Kenya wants an Appeal by Safaricom challenging the decision to reduce mobile termination rates dismissed arguing that views from all stakeholders were taken into account.

The CA Director General Ezra Chiloba argued that the reduction was determined after the necessary procedure and substantive consideration.

Chiloba wants Safaricom appeal dismissed with cost arguing that the impugned MTR’s were determined after the necessary procedure and substantive consideration.

CA through veteran lawyer Wambua Kilonzo, argues that granting relief sought by the Safaricom would unjustifiably fetter the discretion of it granted section 5A of KICA in the exercise of its powers, performance of its functions and objectives of the Tariff regulations.

MTRs are the charges levied by a mobile service provider on other telecommunications service providers for terminating calls in its network.

The CA cut the charge to Sh0.12 per minute from the current Sh0.99 per minute after a six-year freeze.

Safaricom that earns the most from MTR due to its large voice market share of 68.9 percent, challenged the move before the Multimedia Appeals Tribunal. The capping was to start on January 1

CA through veteran lawyer Wambua Kilonzo, argues that granting relief sought by the Safaricom would unjustifiably fetter the discretion of it granted section 5A of KICA in the exercise of its powers, performance of its functions and objectives of the Tariff regulations.

The communication Regulator told the Tribunal that upon requisite public participation, it retains the discretion to ultimately determines the methodology to adopt in reviewing MRTs and FTRs.

“This is consistent with the provisions of section 5A of the KICA that, the CA shall be independent and free of control by government, political or commercial interests in the exercise of its powers, performance of its powers and in the performance of its functions “, lawyer Kilonzo submitted before Tribunal.

Lawyer Kilonzo further told the Tribunal that, Safaricom has not demonstrated the extent to which, if any, that it is not able to recoup its incremental costs for interconnection with other.

“In fact, it has demonstrated that in the years 2020 and 2021, even with the current interconnection rate of Sh0. 99, Safaricom successfully ran a number of promotions and special offers targeting voice services where the effective discounted rate per minute for both on-net and off-net calls is as low as Sh0. 2”, CA told the Tribunal.

The CA dismissed Safaricom argument saying that the impugned MTRs and FTRs promote effective competition and Safaricom has not demonstrated the contrary.

Tribunal heard that from its analysis of stakeholder impact, it was concluded that the lower the voice termination rates would facilitate great retail price flexibility which would facilitate in the overall price levels for mobile services to the benefit of consumers. On the impact on the industry players, CA determined that the proposed revisions would lead to reduced net transfers occasioned by the current imbalanced.

CA’s added that Safaricom enjoys economies of scale and their costs are low compared to other small operators and proposed low termination rate will give small operators greater price flexibility to compete with safaricom.

CA also analyzed the potential impact of the reduction in MTRs on the revenues of three MNOs in Kenya, Safaricom, Airtel and Telkom Kenya ltd using voice traffic patterns for the quarter ended June 30,2021.

BY SAM ALFAN.

A Nairobi court has granted the Director of Public Prosecution Nordin Haji time to decide whether to exclude the Keroche Industries chairman Joseph Muigai from a Sh14 billion tax evasion case.

Trial Magistrate Esther Kimeru said it was upon the DPP to decide whether to exclude Muigai from the trial, especially after the case was adjourned because the elderly man was hospitalized.

His lawyer James Orengo told the court that Muigai is admitted at the Karen Hospital and it was his view that he should be excused as the trial proceeded.

Muigai is charged alongside his wife Tabitha Mukami. The court directed the matter to be mentioned on June 14 for directions.

The couple is accused of unlawfully making incorrect statements of their excise duty returns between February 2015 and January 2016, which in turn reduced their company’s tax liability by Sh1.8 million.

They also face a second count of making incorrect excise tax for February 2016 and January 2017, amounting to Sh3.1 billion.

On the third count, they are accused of filing incorrect excise duty books to the tune of Sh3.6 billion, an offence they allegedly committed between February 2017 and January 2018.

The charges read that between 2018 and January 2019, another excise tax entry was unlawfully made which exposed the firm to a Sh2.5 billion liability.

Charges also consist of Sh1.9 billion excise tax which was allegedly to be paid between January and June 2019. They were also charged with omitting Value Added Tax (VAT) returns between 2016 and this year.

Prosecution told the court that between February 2016 and January 2017, Sh551 million was not remitted by the firm to the tax collector, and that between 2017 and 2018 , the amount was Sh613 million.

BY SAM ALFAN.

National Oil Corporation of Kenya has been ordered to pay Total Kenya Sh38 million for breach of contract.

Justice Francis Tuiyott ordered Nock to pay the oil dealer for failing to deliver the commodity as agreed.

In his judgement, Justice Tuiyott directed Nock to pay USD 192,357.54 for breach of November contract, USD 38,197.8 for late delivery penalty, USD 2,566 for under delivery penalty and USD 94,973 for non-delivery penalty.

The judge ordered money shall be paid in US dollars or on conversion to Kenya shillings at the rates prevailing and set by Central Bank of Kenya on the date or dates of payment are made.

However, the court declined Total Kenya’s request to follow the conversion on special damages that interests shall be at court rates from the date of filing suit to full payment.

The court heard that the two company’s entered the deal in November 2010 for the supply of 7000MT of gasoil.

What was not agreed and falls for determination is whether or not the pricing in the contract was outside the Kenya Open System Tender (OTS) which was explained to be the tender under which the importation and sale of oil products in Kenya is operated.

However, the price was to be five days around the Bill of lading (dates) whereas all other lading charges were to be per the OTS cost buildup.

Aggrieved Total Kenya told the court that Nock unilaterally and arbitrarily abandoned the covenanted price mode and invoiced it at the price mean of USD 96,2562 bbl as opposed to the contractual price mean of 91.5420/bbl .

Total Kenya argued that as a result of the irregular and unilateral act, it overpaid by USD 192,357.54.

But Nock contends that the contract was structured in the same manner as the OTS terms and conditions in which the pricing clause covered the applicable Free on Bond (FOB) freight and premium components.

Nick explained to the court that at the time of tender, there was no certainty as to what as to what would be the FOB basis for cargoes arriving in November 2010 as the ministry of energy had not given clarification as the applicable basis that is whether to peg the pricing on the five days round the bill of loading date or no the whole month average.

Nock stated that in invoking clause 9(a) of the OTS, it choose and applied Deemed bill of lading date and denied overpayment